Court grills FCC, Tennis Channel in Comcast discrimination suit

WASHINGTON Feb 25 U.S. Court of Appeals judges
on Monday hit hard against the Federal Communications Commission
and Tennis Channel in a case alleging Comcast Corp
discriminated against the sports network, even raising the
possibility of rendering the entire case moot because it might
have been filed too late.

A three-judge panel raised a number of technical concerns
with the arguments of the regulator and the sports channel -
including an underpinning one of timing - as it weighs whether
Comcast can be required to distribute the network to as many
subscribers as it does its own affiliated sports channels.

In what Comcast has called "dramatic regulatory overreach,"
the FCC in 2012 sided with Tennis Channel and an administrative
law judge, ruling that the top U.S. cable operator unfairly
placed the channel in a more expensive and thus less-watched
tier than its own Golf Channel and NBC Sports Network.

The rule, reached by a 3-2 commission vote along party
lines, required Comcast to put Tennis Channel on par with its
own sports network. It was the first time a cable network
prevailed over a cable operator under the FCC's 1993 federal
anti-discrimination program carriage rules.

Comcast has argued that the FCC's requirement infringed upon
its freedom of editorial judgment and freedom of speech, but
Judge Harry Edwards repeatedly brought the conversation back to
the question whether Tennis Channel's complaint came too late.

"You can't come up at any time eight or 10 years later and
say, 'You know what, I hate the contract," Edwards said.

Tennis Channel filed its complaint with the FCC in 2010
after signing the contract with Comcast in 2005. Comcast said
the contract stipulated the placement, and an old FCC rule
limited timing of disputes of such agreements to one year.

The FCC said the timing was fair because the complaint came
within a year of notifying Comcast of its intent to do so as
well as Comcast turning down the request to be moved to a higher
viewing tier.

"If you are essentially upset about the contract, too bad,"
Edwards said, calling the regulator's new interpretation of its
own statute of limitations "ridiculous."

Tennis Channel argues that an earlier complaint would have
been "premature" because at the time it could not have been
compared to the popular Golf Channel and Versus sports networks.

But in late 2008 it gained rights to the U.S. Open and
high-definition ability, making it more competitive. A lower
tier, it now says, deprives it of advertising revenue and higher
per-subscriber fees collected from Comcast for content.

Judge Stephen Williams raised concerns about the unclear
financial implications of requiring Comcast to move Tennis
Channel as the FCC and the network say that Comcast weighed the
costs of having Tennis Channel in a higher viewing tier but did
not adequately analyze the benefits. Comcast argues that it did,
and found none.

Judge Brett Kavanaugh delved more into the question of
freedom of speech. The U.S. Congress differentiates how much
regulatory power can be wielded over companies that can dictate
market prices and those that cannot, and Kavanaugh said
so-called "non-market powers" could not be forced to "carry the
speech they don't like."

That aligned with the arguments of Comcast's lawyer, Miguel
Estrada. "If there's no market power consideration, I am
entitled under the First Amendment to like my speech better than
yours," he said.

As long as the case remains outside of the arguments about
Comcast being such a market power, Kavanaugh said that forcing
the cable operator to change how they treat Tennis Channel
"seems contrary to our traditions."

The court is expected to decide in the next few months based
on Monday's arguments and written briefs submitted earlier.

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